Informer: Maternity care not reason for scuttled policies

Is it true that most of the insurance cancellations are because one of the clauses of Obamacare is that everyone has to carry
prenatal in the policy?

No.

The Affordable Care Act lists maternity
and newborn care among the 10 “essential health benefits” categories
that insurance
plans must cover. But inclusion of services under that category
alone isn’t the reason for the cancellation notices that have
been sent to individual purchasers in recent weeks.

The primary reason for the cancellations is the policies weren’t subject to the ACA’s grandfather clause, which The Informer
wrote about in September 2012.

Under the grandfather clause, plans that existed on March 23, 2010, when the ACA was signed into law, were exempt from most
of the health care reforms as long as the policies didn’t undergo significant changes — such as large shifts in cost share
or a sharp reduction in benefits.

Some canceled policies were undone because they changed, losing their exempt status. Others were canceled because they were
purchased after March 2010 — meaning they never were exempt — and didn’t comply with the ACA’s requirements, including the
essential benefits provision.

“Most policies in the individual market
are not ‘grandfathered’ and therefore have to come into compliance with
the ACA requirements
starting on January 1, 2014 or when those policies renew
throughout the year,” reads the website of America’s Health Insurance
Plans, an industry group.

“The primary reason most policies are
not grandfathered today is because people chose to change their policies
or purchased
new coverage after the law was enacted. According to regulations
released by (the Department of Health and Human Services),
‘between 40 percent and 67 percent of policies are in effect for
less than one year’ and ‘the high turnover rates described
here would dominate benefit changes as the chief source of changes
in grandfather status.’ ”

President Barack Obama on Thursday
announced that the administration would permit insurance companies to
offer non-ACA-compliant
policies for an additional year if they wanted to. U.S. Sen. Mary
Landrieu, D-La., is pushing a bill that would require insurers
to renew the policies.

The House on Friday passed a
GOP-sponsored plan to allow insurers to renew the canceled plans and to
keep selling low-cost,
bare-bones policies that don’t comply with the ACA. The president
has threatened to veto the bill, which isn’t likely to get
through the Senate.

The Informer answers questions from readers each Sunday, Monday and Wednesday. It is researched and written by Andrew Perzo, an American Press staff writer. To ask a question, call 494-4098, press 5 and leave voice mail, or email informer@americanpress.com